And What It May Mean for You
On January 5, 2025, President Biden signed the Social Security Fairness Act into law. The law received bipartisan support from Congress as well as the Senate and amends the Social Security Act for any benefits payable after December 2023.
What is the Social Security Fairness Act?
The Social Security Fairness Act (“the Act”) eliminates the reduction of Social Security benefits for those entitled to public pensions. Specifically, the Act repealed the windfall elimination provision (WEP) as well as the government pension offset (GPO).
The WEP reduced Social Security retirement and disability benefits for individuals who worked for an employer that didn’t withhold Social Security income tax. The provision most commonly affected teachers, law enforcement, firefighters and other public sector employees — as well as retirees with pensions earned for work performed in another country. The Social Security Administration (SSA) reports that approximately 3% of Social Security recipients were impacted by the WEP,[1] and individuals no longer impacted by the WEP may see their Social Security benefits increase by as much as $613 per month in 2025.
The GPO reduced Social Security survivor or widow(er)s benefits for those who received a pension from a federal, state or local government based on work for which they didn’t pay Social Security taxes. This provision reduced Social Security benefits by two-thirds of the amount of the public pension. In some instances, Social Security benefits were reduced to $0. The SSA reports that approximately 1% of retirees were impacted by the GPO, and those no longer impacted by the GPO may see a significant increase to their Social Security benefits.
When will my benefits increase?
The SSA is currently evaluating how to implement the Act for all eligible beneficiaries. It’s likely the SSA will issue a lump sum distribution for individuals impacted by the Act and that benefits will be paid retroactively to January 2024. The Administration has a history of making lump sum distributions for individuals whose benefits were computed incorrectly (and when retroactive payments are made for individuals with a disability). If you’re affected by the Act, be sure to coordinate with your tax accountant for any federal and state taxes that may be due on receipt of a lump sum distribution from the SSA.
How can I make sure my benefits are maximized?
For individuals already receiving Social Security benefits, confirm that your direct deposit information and mailing address are current with the SSA. Most people can update their information online at www.ssa.gov/myaccount. If you haven’t filed for Social Security retirement or disability benefits because your benefits may have been previously eliminated, you might consider filing an application online at www.ssa.gov, by phone at 800-772-1213 or at your local Social Security office. Individuals may subscribe to updates from the Social Security Administration here.
